University of Illinois Urbana-Champaign

An examination of the post-acquisition performance of bank acquisitions

Ellinger, Paul Norman

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Description

Title
An examination of the post-acquisition performance of bank acquisitions
Author(s)
Ellinger, Paul Norman
Issue Date
1992
Doctoral Committee Chair(s)
Lynge, Morgan J., Jr.
Department of Study
Finance
Discipline
Finance
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
  • Economics, Finance
  • Business Administration, Banking
Language
eng
Abstract
  • This study evaluates post-acquisition performance adjustments in banks that have been involved in bank acquisitions. Evaluation of post-acquisition changes in productive efficiency, leverage, and portfolio mix are the basis for the analysis. The magnitude and types of performance changes that have occurred in the banking industry are a significant public interest concern due to banks' role in local, regional and national economic developments.
  • Time-series intervention analysis and graphical representation are used to determine the impacts of the acquisitions on various performance measures. Furthermore, the concepts of bank productive efficiency are outlined and the changes in efficiency resulting from bank combinations are evaluated. This empirical study employs a frontier technique to measure individual bank inefficiencies using quarterly data. In addition, the technique outlines the extent to which various input and output relationships can be attributed to inefficiency.
  • The data used for the analysis are taken from four sources. The accounting information for each bank is obtained from the quarterly Call and Income reports from March 1976 through December 1990. The price and acquisition data are obtained from selected issues of Bank Expansion Quarterly. Data on deposit concentrations in rural and urban markets are obtained from Summary of Deposits information provided by the Federal Reserve Bank. Market location of the bank holding company is obtained from Y9 Bank Holding Company data also provided by the Federal Reserve Bank.
  • Results indicate acquired banks tend to exhibit non-positive changes in efficiency, higher loan to deposit ratios, lower capital ratios due to dividend policies, and, in general, increases in both credit risk and financial risk associated with these latter changes. However, many of the adverse changes do not simultaneously occur at acquired banks.
Type of Resource
text
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http://hdl.handle.net/2142/19056
Copyright and License Information
Copyright 1992 Ellinger, Paul Norman

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